New data shows European diesel VW values are holding up, potentially dashing hopes that owners will win compensation.
When the dieselgate scandal broke, values of diesel-engined Volkswagen Group cars were expected to nose dive in Europe, as they have in the United States. But new data shows that has not happened, which could undermine calls from consumer groups across the continent for VW to be compelled to offer compensation to European owners.
A deal was agreed earlier this year for 475,000 American owners of emissions cheating VW Group diesel cars to be offered up to $10,000 in compensation and a vehicle buyback, on top of the $1,000 in cash card and vouchers VW had already volunteered.
European Union commissioner Elzbieta Bienkowska has led calls for VW to offer the same package to the 8.5 million owners of affected cars in Europe. A number of consumer groups and government officials have joined the chorus, but VW has resisted the increasing pressure, maintaining that the cars in question do not technically breach European law, therefore there is no need for compensation to be offered.
Central to the compensation argument is the assumption that the affected cars are now worth less than they would have been if the emissions cheating issue had never come up. However, it seems that is not the case, according to VW’s in-house financial services unit, VWFS.
VWFS cites data released by independent German car market tracker Schwacke which shows that values of used VW diesels are holding up. VWFS had initially devalued its diesel lease portfolio by €570 million ($595 million) in the immediate aftermath of dieselgate.
That figure equated to a three percent drop in value for each affected car. VWFS also figured gasoline-powered models would suffer blowback to the tune of one percent. But that has not been the case. Indeed, Schwakce’s data shows marginal gains against comparable diesel cars.
All of which means that any owners looking to sell their emissions cheating VW should not be hit in the wallet. Especially if the car has been recalled to be made compliant.
Should any pressure groups bring VW to court claiming compensation, the automaker now has a solid case for the defense. Not that a ruling in VW’s favor would in any way help the situation.
Source: Automotive News Europe